If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will

Question

Quizplus · Accepted Answer

A government-mandated increase in the price of X would result in a higher price than the market equilibrium price. This would cause the quantity supplied to increase, as suppliers are willing to produce more at a higher price, while the quantity demanded would decrease, as consumers are less willing to buy at a higher price. However, the demand and supply curves themselves would remain stable. Therefore, the best choice is C, as it correctly identifies the direction of changes in quantity supplied and quantity demanded.

If the Demand and Supply Curves for Product X Are